April 25, 2018 / 5:16 PM / 3 months ago

Cocoa industry pledges co-ordinated action on poverty, deforestation

BERLIN (Reuters) - Companies and governments have pledged to tackle poverty, deforestation and human rights abuses in the cocoa supply chain, acknowledging that years of scattered sustainability efforts have failed to spur widespread change.

FILE PHOTO: A view of a sustainable cocoa plantation in a farm in Medicilandia, Para state, Brazil, March 19, 2018. REUTERS/Marcelo Texeira/File Photo

The four-day World Cocoa Conference in Berlin culminated on Wednesday in stakeholders issuing a declaration to coordinate efforts to stamp out exploitation and environmental degradation in cocoa.

“Whatever we’ve been doing all these years doesn’t seem to work,” Jean-Marc Anga, executive director at the International Cocoa Organization (ICCO) told the conference this week. “This is not sustainability as we envisaged it.”

The pledge follows what the ICCO called a “proliferation of uncoordinated initiatives” by companies, governments and certifiers - many aimed at lifting farmer incomes by increasing productivity on plantations.

Partly driven by concerns about future cocoa supplies, chocolate companies and trading firms poured large investments into distributing high-yielding seeds and training farmers on better practices in a bid to help them improve their output.

Yet, as a sharp surge in production last season drove prices to their lowest in more than nine years, this approach to alleviating poverty came under fire from critics who say it is contributing to the glut.

The decline in world cocoa prices has only worsened the plight of farmers, slashing their earnings by about 30 percent on average, the ICCO’s Anga said.

“It’s been very harmful for the producers, who wonder what sustainability means for the cocoa sector,” Ivory Coast’s trade minister Souleymane Diarrassouba said.

FILE PHOTO: Men work on sacks of cocoa beans in Kahin village at the edge of Scio forest reserve in Duekoue, Ivory Coast February 9, 2018. REUTERS/Luc Gnago/File Photo

Sustainable certification - designed to ensure more ethical practices and better earnings - has also fallen short as the premiums farmers receive under the biggest of these schemes have been falling.

To make cocoa sustainable, the industry must shift away from a “selfish” focus on ensuring supplies and towards promoting crop diversity, said Nicko Debenham, vice president of sustainability at Barry Callebaut.

“We’ve got to have professionalised farms, with diversity of income,” he said. “As well as ensuring that we’re not over-producing cocoa and finding ourselves in the mess that we’re in at the moment.”

Chocolate makers and processors must also ensure they are paying a fair price to farmers, who currently command only 6 percent of the $100 billion value chain, the ICCO said.

Anga noted the drop in global prices led to $3.5 billion in savings for chocolate companies in 2017, yet none of it made its way to cocoa growers.

Meanwhile, producing countries such as Ivory Coast and Ghana must coordinate their policies and take steps to cap production at sustainable levels.

“There needs to be stronger national management of production policies, in line with global stable demand projections,” Rick Scobey, president of the World Cocoa Foundation, told Reuters in an interview this week.

This means producing countries must better gauge how much cocoa is being grown and halt the encroachment of plantations in protected forests. The surge in cocoa production has partly come from such illegal farms.

Boosting local chocolate consumption and cocoa processing has also been seen to help origin countries become more resilient to global market volatility.

Reporting by Ana Ionova; editing by David Evans

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